Is your nonprofit equipped to respond to a financial crisis? A crisis can take many forms and fall along a continuum of urgency. How urgent the crisis is depends upon your organization’s underlying health, the ecosystem you are operating in, and the actual crisis itself.
A fundraising crisis can arise due to an unanticipated loss of revenue, storm damage, a lawsuit, vandalism, or loss of a key employee. The crisis could be unexpected. It could also have been looming on the horizon held off with prayer, loans, and committed donors. What becomes a crisis could also be the result of an inability to build diversified revenue streams. In many cases a crisis is the result of unanticipated circumstances. Think back on 2008 and the following years: so many nonprofits were in crisis at a time when the people and communities they served needed their services and advocacy more than ever.
When we are in good times most of us believe our budgets, relationships, and projected revenue will provide us with the resources we need to cope with a crisis. This is true for some, but not for all.
We offer the following questions to help you think about the unthinkable.
- Who in your organization could lead an emergency fundraising campaign? Which board members, staff, volunteers, supporters, or funders could provide leadership?
- Which donors and prospective donors could you turn to?
- Do you have contingency plans you can put in place? These could include a contingency operating plan and a contingency fundraising plan.
- What type of staff support could be put in place? In case of a storm, for example, how will your organization support its staff while simultaneously looking to staff to support the organization and its operations?
- Are there outside sources who could advance funding to your organization? This could be a temporary bridge loan, line of credit, or loan against assets. Related to this, what type of relationship do you have with the financial and other institutions your organization does business with?
- Can you make a clear, concise and compelling case for why individuals, businesses, government and philanthropy should provide emergency funding?
- Do you have the confidence and “will” amongst your supporters to meet the challenges of the situation?
- Do you have the capacity and infrastructure to make a come-back?
- Will the crisis create a “distraction” that derails your annual fundraising and other campaigns underway? How will you reorganize your priorities?
- Is this really a crisis or the result of a lack of planning or a lack of adequate investment in your organization?
Take the time to consider these questions. Emergencies and crises are part of life – prior consideration can ease future pain.
Copyright 2019 – Mel and Pearl Shaw
Mel and Pearl Shaw believe that planning can help lessen or avert a crisis. Learn more at www.saadandshaw.com. Call us at (901) 522-8727 for fundraising planning and strategy services.